Healogica to Close, Plans to Sell Trial Matchmaking Technology

Monday, March 1, 2010

Healogica is the latest clinical trial listing service to shut its doors, but the company’s trial matchmaking technology may live on if company founders get their wish.

Healogica plans to close its New York City operations in the coming months, but co-founder Jean-Luc Neptune, M.D., said he is hopeful that a suitable buyer will resurrect the company’s clinical trial listing platform.

“We’ve been having discussions with a variety of different suitors and people we’ve met along the way who are interested in the tools that we’ve developed,” Neptune said. “Even though we haven’t been able to make a business out of it, I think people realize that the user interface and the user experience that we developed is really revolutionary and very, very different. We’ve had four separate discussions—and two of them are relatively late-stage—about acquiring what we developed.”

Neptune hopes to settle on a buyer in the next few weeks.

Healogica was created by Neptune and Edward Shin, M.D., in 2007, but the clinical trial listing platform didn’t officially debut until last April. Since then, the company has struggled to find buyers for its product—despite almost two years of research into its marketability prior to launching the service.

While researching their product, Neptune and his partner sought the counsel of Joshua Schultz, co-founder of defunct trial matchmaker Veritas Medicine. Schultz, who founded his company before the explosion of online social networking, told Neptune that Veritas had struggled with finding enough patients for its service.

“One of the things that we thought [Healogica] could do was use social media, search engines, affiliate relationships to drive traffic at a much lower cost—that was one big element of our model,” Neptune said.

According to Neptune, Schultz also told Healogica founders that his company had made a mistake by targeting large pharmaceutical companies as the main buyer for its product. He suggested Healogica avoid Big Pharma “at all costs,” Neptune said, and instead focus on the end user— investigative sites.

“If you try to think about clinical trials, clinical trials are sponsored by large pharmaceutical companies who decide how they want to test this drug and what indications they want to use, but, at the end of the day, the actual enrolling of patients into the trials is done at relatively small research centers,” Neptune said. “These small centers generally get budgets from large pharmaceutical companies so that they can advertise for patients. State-of-the-art right now for a lot of these small centers is to place an ad in the newspaper—a dying form of media—or to place an ad on radio or TV, both sort of traditional, untargeted media. We always thought that we could take those budgets and redirect them from untargeted media to targeted digital online media.”

The business plan seemed good in theory, but once Healogica launched its service, the founders faced more skepticism and fear of the Internet and legal issues at the site level than they expected. When selling to the end user didn’t work, Neptune and his team attempted to sell upstream to pharmaceutical companies, but, as Schultz had predicted, that didn’t work either.

“We had a meeting with some innovation people at this very well-known pharma company, and they basically said, ‘Companies like yours are not at all part of our plan for recruiting patients to clinical trials.’ When the guy said that, we realized there’s no place for us in this world,” Neptune said.

Most pharma companies still use traditional offline patient recruitment agencies, Neptune said. Some of those traditional companies are starting to use online recruitment methods, and Neptune still sees a market for Healogica’s service.

“Pharma companies are facing huge pressure to get patients involved, and there is a huge number of patients out there who could qualify for clinical trials. There’s a big demand and a big supply. The big problem that exists in this industry is that the mechanism for connecting patients to trials is very inefficient,” Neptune said. “There is this regulatory paralysis that exists in the pharmaceutical industry, and people are literally afraid to make decisions. I can’t tell you how many times we talked to somebody and they’ve said ‘Hey, I’ve got to talk to my lawyer, and I’ve got to talk to my in-house counsel.’ This is a huge space, and hopefully, in the next few years, we’ll actually be able to move forward.”

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